by Jonathan J. Rusch
Since Australia first criminalized cartel conduct in the Competition and Consumer Act 2010 (CCA), its progress in successfully bringing criminal cartel charges against companies or individuals has been slow and at times tortuous. As of July 2022, there had been only four matters that resulted in criminal convictions for cartel behavior in Australia, and in those matters all defendants had pleaded guilty to the offense. In one 2019 case – the first contested criminal prosecution under the CCA’s criminal cartel provisions – two former corporate executives were acquitted of price fixing and bid rigging. Not until June 2022 did the Australian Federal Court impose the first prison sentences for criminal cartel conduct.
During 2022, however, the Australian Competition & Consumer Commission (ACCC), which investigates criminal and civil violations of the cartel provisions, has been seeking to demonstrate that, as then-ACCC Chair Rod Sims stated, cartel conduct is “a critical component” of the ACCC’s competition portfolio, “and an enduring priority.” As of March 2022, the ACCC reportedly had six cartel matters before the Federal Court and additional investigations underway.
Most recently, on August 16, the ACCC announced that an Australian waste company, Bingo Industries, had entered guilty pleas to criminal cartel offences relating to price fixing for demolition waste services in Sydney. Bingo – now owned by Macquarie Infrastructure and Real Assets — provides landfill, waste processing, and skip bins [i.e., dumpsters] services throughout the states of New South Wales, Victoria, and Queensland.
According to the ACCC, in mid-2019, Bingo “agreed with [two competing firms] to fix and increase prices for the supply of skip bins and the provision of waste processing services for building and demolition waste in Sydney.” In addition, the former managing director and CEO of Bingo, Daniel Tartak, has been charged with two criminal cartel offences. These charges will be heard at a future date by the Federal Court.
At present, there is no indication of the penalties that the Commonwealth Director of Public Prosecutions (CDPP), which is responsible for prosecuting criminal cartel offenses, will seek from the Federal Court against Bingo. Under the CCA, the maximum fine for each criminal cartel offense by a corporate entity is the greater of (1) AUS$10 million, (2) three times the total benefit obtained and that is reasonably attributable to the commission of the offense, or (3) if the value of the benefit obtained cannot be determined, 10 per cent of the corporation’s annual turnover connected with Australia. The maximum penalty for an individual convicted of a criminal cartel offence is 10 years’ imprisonment, a fine of AUS$444,000, or both. The Federal Court has not yet set a date for a case management hearing.
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Jonathan J. Rusch is Principal of DTG Risk & Compliance LLC and Adjunct Professor at American University Washington College of Law and Georgetown University Law Center.